This morning’s flat jobs report is making many wonder if the summer’s debt ceiling impasse and S&P downgrade are partially to blame.
On Friday’s CNBC “Squawk Box,” those events were deemed a “spectacle” that spooked potential employers into holding back on hiring during August. But CNBC/CME Group floor reporter Rick Santelli disagreed, saying that it was wrong to place blame on market forces that aim to get the government’s fiscal house in order. (RELATED: No hiring in August; unemployment sticks at 9.1 percent)
“I get a real kick out of how everybody calls what we went through in July and August ‘the spectacle,’” Santelli said. “The darn spectacle was that getting up to these trillion dollars’ worth of debt, thinking that the action trying to address it is the spectacle is exactly half-button backwards, just like the interpretation that if you dump all this money into the economy, the government will look like they are doing something and that will create a positive dynamic. We have mountain of debt that isn’t going away and all the problems are here to stay, and anybody who tells you that is a good thing ought to get out of the business of helping the government down the road.”
Moody’s Analytics chief economist Mark Zandi countered that government inaction and the prospects of people not getting their Social Security checks was a scary proposition and one which President Barack Obama said was legitimate to fear. That had an impact on the economy, but according to Santelli it was a lie.
“[Obama] was fibbing,” Santelli said. “There was plenty of money. That’s the spectacle. You’re right. That’s the spectacle. Shame on him.”
Santelli argued that the whole “progressive” ideology where compromise occurs to ignore the structural problems with entitlements would be detrimental to the American economy.
“You talk about entitlements like you’re stripping the poor of everything they have,” Santelli said. “They won’t have anything when the country is broke and the lines in the unemployment will be exponentially larger — progressive. What a great strategy that is.”